The Donut Economy

What is the doughnut economy? It’s a groundbreaking new economic innovation which is currently being implemented and tried in Amsterdam, Netherlands. It’s based on the fact that the economic challenges that face the human race in the 21st century are vastly different to those that faced us in the past. Should that be due to overpopulation, greater product demand, depletion of resources who really knows. However the Doughnut economy aims to find a solution to help us better combat these problems.

The doughnut economy strives to ensure that no human being is deprived of life’s essential necessities, Food, Housing, Healthcare or even political voice. It also makes sure that we do not apply more than the necessary pressure on the earth's resources that are fundamental to our survival. This concept is labelled the doughnut economy as the diagram in which one can see the framework of the doughnut economy is shaped in a circle with a hole in the middle just like a doughnut. The hole of the doughnut is meant to show the population of the planet that do not have access to life's essentials. Whilst those on the circle are those who do have access. Past the circle there is a “crust” so to say, this crust represents that planet's boundaries which must not be overshoot as to save the human race. This includes climate change, ozone layer depletion, ocean acidification etc..This economic framework was developed by oxford economist Kate Raworth who published her concept in the oxfam paper “A safe and just space for Humanity” she later elaborated on the concept in her book “Doughnut economics, Seven ways to think like a 21st-century economist”.

One of the critiques about the donut industry is that the marketing and selling doesn’t follow already established and used methods of business. It runs however the person running it wants to run it. It doesn’t follow some of the first economic principles and models which were initially made from social patterns and human nature instead of statistics. Meaning that there is a high chance that the model could fail if not carried out properly. Even though a donut is perishable it isn’t sold the same way as other perishable goods. To a small extent it follows the supply and demand curve however the actual innovation of the donuts and marketing is more similar to a coca-cola ad than a dairy ad. So in conclusion a problem with the donut industry is that it doesn’t follow some of the basic principles of economics.